Saving Interest free Overdrafts?

Scouser_23

I was just wondering whether there is any reason I could not take out the Alliance and Leicester account with the 0% overdraft, take out the 2500 and put it in a mini cash ISA or a high interest savings account, even drip feeding into a regular savings account, and then pay it back after 12 months?


As long as I paid the 500 into the A&L account each month to keep it open would there be any problem with this?

angelavdavis

None at all - its known as stoozing and is more common for 0% credit card holders

oldfella

works fine - only thing to be careful of is A&L online system - its awful - very easy to end up over your limit and into penalty payments

Scouser_23

Thanks for the help guys that's great to know.

With regard the online system I'd thought the account would have debit card so once I'd made the intial transfer into the ISA I'd not have to bother with it and could just use my card for getting money out. Was that incorrect?

Secondly if I want to keep my current current account, mostly to save the hassle of getting my work to change it, something I know they are not that hot at, does anyone know whether the acount fund requirements can be met my simply transferring the money in from my current current account, say by setting up a dd 5 days after pay day? Would this work or would they likely not accepet money from another account that was mine as qualifying to meet the requirements?

Once again thanks for the help

KTF

Unless you use the transfer service to match an existing account with a large overdraft you will probably only get one in the low hundreds rather than thousands.

You can transfer money in and out using standing orders or a debit card like any other account.

As long as the 500 comes from a non A&L account you can transfer it in and out on the same day if you want.

Scouser_23

Thanks for that KTF, I'm just a bit confused by what you mean here:

'Unless you use the transfer service to match an existing account with a large overdraft you will probably only get one in the low hundreds rather than thousands.'

?

I thought you were able to get 2500 interest free overdraft on the A&L account? If this isn't what you mean then what do you mean about the thousands?

KTF

If you have a current account with a large overdraft at the moment and use the A&L switching service to move all the DD, etc to them then they will generally match the overdraft amount and make it 0%.

If you just open the A&L account and dont use the switching service they tend to give you an overdraft of £300 or so from my experience.

oldfella

I got a 2000 overdraft a year ago without using the matching service

angelavdavis

I was automatically given a £2000 limit on the overdraft too